Forecasting and Stress Testing

Use debt capacity analysis and cash flow forecasts as a tool in making and supporting credit recommendations with the focus on stressing key assumptions and building various scenarios (base, downside and breakeven).

This workshop equips participants to:

• Set realistic and defensible assumptions based on their understanding of the company’s business and financial strategy
• Model a company’s future debt servicing ability based on cash-flow forecasts and sensitivities which are consistent and supportable in the current economic climate
• Use debt capacity forecasts to quantify sustainable debt levels in context of business strategy, market conditions and potential corporate actions
• Adapt a basic cash flow model to reflect industry drivers and company specific reporting considerations
• Create and sensitise base case, breakeven and downside case scenarios to determine the effectiveness of covenants and the company’s ability to service debt under various scenarios.